Brazil’s President-Elect Urges Pension Reform ASAP

Jair Bolsonaro, Brazil’s new president-elect, doesn’t want to wait until his January inauguration to tackle the nation’s pension reforms as he plans to hash things out with current President Michel Temer as early as next week.

Bolsonaro, who captured 55% of the votes in Sunday’s election, wants to tackle the issue as early as possible by reviving an unpopular bill, since he will not have much time to revise it once he takes the torch from Temer as the first of lower parliament’s two sessions begins in February.

“Any step taken now could help us next year,” he told Bandnews TV in a Tuesday interview.

Paulo Guedes, Bolsonaro’s economic advisor, also urged a quick overhaul, calling Brazil’s pension funds “an airplane with five bombs on board that will explode at any moment.” In an interview with Voa news, he said, “We’re already late on pension reform, so the sooner the better.”

Plans to solve Brazil’s pension predicament come amid a backdrop of towering public debt and a troubled economy. Tuesday’s 3.7% rise in the Bovespa index was seen as an expression of confidence in the nation’s new leader.

Some political staffers in the legislative branch, such as Rodrigo Maia, speaker of the lower house, think rushing a reform is not in Brazil’s best interests.

“Voting any matter regardless of what it is, welfare or not, for the future government to suffer a defeat I think it is bad for the incoming government. We must have patience,” Maia said, as reported by the UOL news agency. “The conditions to approve it are still a long way from reality.”  

Temer had originally hoped to resolve the pension crisis last year by cutting benefits, bumping up the national retirement age, and adding years of service clauses for retirees to obtain their full benefits. But corruption charges and public protests slowed the process. After the protests led to military action, Temer decided he would leave the pension question to his successor.

Although the bill is still unpopular, Brazil’s economy isn’t getting any healthier, and the pension reform is the first of many steps Bosonaro must take to stabilize it.

“It remains an unpopular reform which a lame-duck leader has little power to push through Congress,” Leonardo Barreto, a Brazilian political consultant, told The Wall Street Journal. “This is a great opportunity to get it done.”